Great Northern Railway Co. v. United States

Background

The dispute is between the United States and a railroad company that in 1907 acquired the St. Paul, Minneapolis and Manitoba Railway’s property, including rights of way under the 1875 law. The United States sued to stop the railroad from drilling for oil, gas, and other minerals under its right of way. The railroad admitted it planned three wells and denied federal title to the minerals. Lower courts entered an injunction forbidding drilling, and the case reached this Court to decide who owns the minerals below the right of way.

Reasoning

The Court looked at the words of the 1875 statute and its history. It found the law granted only an easement — a right to use and occupy the strip of land, not ownership of the land or what lies under it — pointing to the statute’s language, Congressional debate, and early Interior Department rules. The Court rejected later statements that the grant created a limited fee because those relied on older land-grant cases and were inconsistent with the 1875 Act and later Congressional acts. The Court therefore concluded the railroad has no title to the oil and minerals, but it noted the railroad could develop minerals only by securing a federal lease under the 1930 statute.

Real world impact

As modified on stipulation, the Court affirmed the injunction only for the tracts the parties specified, including certain lots within Glacier National Park. The ruling leaves federal title in place for those areas and requires railroads to use federal leasing procedures to develop subsurface resources.